Legislature Looks to Deregulate Telecom and Cable Companies

Critics argue that overhauling regulations could leave consumers without basic service, public access, and protection.

It might be a tad more difficult getting hold of the cable guy in the next few months.

The state legislature is poised to pass a bill that would essentially scrap any remaining regulatory oversight of New Jersey’s telecommunications and cable TV companies.

The bill is the latest effort by the Democratic-controlled legislature to overhaul the state’s regulatory structure, a move proponents argue would eliminate rules that have become outdated and burdensome given the radical changes sweeping the industry.

Deregulation has become a priority both for lawmakers and for the Republican administration, much to the frustration of environmentalists and consumer advocates.

Time for Change?

"The reality is things change," said Assemblyman Joseph Cryan (D-Union), a sponsor of the bill (A-3766), speaking before the Assembly Regulatory Oversight and Gaming Committee earlier this month. He argued there is a need to bring New Jersey’s telecom regulatory structure in line with that of the federal government.

"A competitive telecommunications market allows the economy to grow, and the market has never been competitive," Cryan said.

The bill is strongly backed by business interests, Verizon New Jersey and other telecomm companies, as well as their rivals in the cable TV sector. But consumer advocates say it will leave customers with no recourse if they encounter problems with service quality, billing and other issues.

"This is not a matter of eliminating red tape or unnecessary regulation," said Stefanie Brand, director of the Division of Rate Counsel. If the legislature enacts this legislation, it will be leaving consumers on their own when dealing with telephone and cable companies."

Brand also is concerned that the bill could allow companies like Verizon to no longer offer basic telephone service, which lets consumers to make local calls for $8.95 a month. There are 1.4 million customers receiving basic phone service in New Jersey, she said.

"There are still a lot of people who like that service, and they tend to fall in the category of those who are most vulnerable," she said. "And there is no competition for that service."

Ev Liebman, program director for New Jersey Citizen Action, the state’s largest consumer group, also opposes the bill. She is seeking to convince legislative leaders to amend the measure to maintain basic consumer protections. Verizon had sought to convince the state Board of Public Utilities (BPU) two years ago to strip away these rules, but was rebuffed by the state agency, Liebman noted.

"Now, they are trying to do it through the legislature, hoping they won’t ask the tough questions, and, so far, they haven’t," Leibman said.

Public Access

The legislation also is of concern to local towns, which fear they could lose public access channels provided for free by cable companies and Verizon. "Why is this bill being fast-tracked?" asked Newark Councilwoman Mildred Crump.

In a letter sent to mayors yesterday, the New Jersey State League of Municipalities urged them to contact lawmakers to hold the bill because it unduly restricts the obligation of cable companies to provide cable and internet connections to municipal and school buildings at no charge.

Cryan argued the bill will ensure towns get to keep their public access channels. "It provides a reasonable amount of consumer protections that we’ve come to expect. It’s good for New Jersey’s economic growth," he said.
Karen Alexander, chief executive officer of the New Jersey Utilities Association, agreed. "New Jersey is doing the right thing to streamline its regulatory process," Alexander said.

She and other proponents argued the robust competitive nature of the sector will ensure that consumers will be treated fairly by the companies they select.

Dennis Bone, president of Verizon New Jersey, noted that 90 percent of the state’s zip codes have at least 10 competitors vying for the consumer’s phone service. "New Jersey has the most competitive market in the nation," Bone said.